Meet Zeekr: The Chinese EV maker looking to put a charge back into the IPO market

Electric vehicle maker Zeekr (ZK) is expected to price its IPO this week and begin trading on the New York Stock Exchange. The Geely-owned sub-brand is looking to offer 17.5M ADSs in a range of $18 to $21 and is seeking a valuation of over $5B. Geely Automobile (OTCPK:GELYF) (OTCPK:GELYY), Mobileye Global (MBLY), and Contemporary Amperex Technology Co. are interested in subscribing for as much as $349M worth of shares in the offering.

Zeeker (ZK) described itself in a recent SEC filing as a fast-growing BEV technology company that aspires to lead the electrification, intelligentization, and innovation of the automobile industry.

“Since our inception, we have focused on innovation in BEV architecture, hardware, software, and application of new technologies. Our efforts are backed by our strong in-house R&D capabilities, deep understanding of products, high operational flexibility, and flat, efficient organization structure. Together, these features enable fast product development, launch and iteration, and a series of customer-oriented products and go-to-market strategies. Thus, we are able to rapidly expand even with a limited operating history.”

The current model lineup includes the Zeekr 001, Zeekr 001 FR, Zeekr 009, Zeeker X, and an upscale sedan model.

In 2023, Zeeker (ZK) generated revenue of $7.28B and recorded a net loss of $1.16B. Monthly deliveries in 2024 have ranged from 16,089 in April to 7,510 in February. The company aims to deliver 230K vehicles this year.

Zeeker (ZK) updated that it anticipates vehicle sales revenue in the first quarter of 2024 to be higher than the first quarter of 2023, but lower than the fourth quarter of 2023 due to seasonality that impacted delivery volume, as well as the lower average selling price primarily caused by the change in the product mix. Zeekr (ZK) also estimates that its gross profit margin in the first quarter of 2024 to be lower than the fourth quarter of 2023 because of the negative effect of the delivery of new vehicle models, as well as change in product mix, and the increase in the percentage of revenue contribution from sales of batteries and other components that has a lower gross profit margin than vehicle sales.

The Zeekr (ZK) IPO will be of high interest to shareholders of Nio (NIO), Li Auto (LI), XPeng (XPEV), and VinFast Auto Ltd. (VFS) to see what kind of valuation the new EV stock can command. It also has some broad IPO market implications, since it will be the first Chinese IPO in the U.S. by a Chinese company in more than two years.